NewJersey Resources Corporation

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the New Jersey Resources fiscal 2023 fourth quarter and year end conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, press star 1 again. I would now like to turn the conference over to Adam Pryor, Director of Investor Relations. Please go ahead.

Thank you so much. Welcome to New Jersey Resources Fiscal 2023 Fourth Quarter and Year-End Conference Call and Webcast. I am joined here today by Steve Westhoven, our President and CEO, Roberto Bell, our Senior Vice President and Chief Financial Officer, as well as other members of our Senior Management Team. Certain statements in today's call contain estimates and other forward-looking statements within the meaning of the securities loss. We wish to caution listeners of this call that the current expectations, assumptions, and beliefs forming the basis for our forward-looking statements include many factors that are beyond our ability to control or estimate precisely. This could cause results to materially differ from our expectations as found on slide one. These items can also be found in the forward-looking statement section of today's earnings release, furnished on Form 8K and in our most recent forms, 10K and 10Q, as filed with the SEC. We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. We will also be referring to certain non-GAAP financial measures, such as net financial earnings or NFE. We believe that NFE, net financial loss, utility gross margin, Financial margin, adjusted funds from operation, and adjusted debt provide a more complete understanding of our financial performance. However, these non-GAAP measures are not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in Item 7 of our 10-K. The slides accompanying today's presentation are available on our website and were furnished on our Form 8-K filed this morning. Our agenda for today is filed on Slide 4. Steve will begin with this year's highlights, followed by Roberto, who will review our financial results. Then we will open the call up for your questions. With that said, I will turn the call over to our President and CEO, Steve Westhilton. Please go ahead, Steve.

Thanks, Adam, and good morning, everyone. Fiscal 2023 represented another solid year at NJR, as we reported earnings well in excess of our industry-leading 79% long-term growth rate. Our performance this past year speaks to the strength of our diversified business model and our ability to adapt to challenges in ways that benefit our customers and our investors. This morning we reported fiscal 2023 net financial earnings per share of $2.70. This is at the top end of our revised guidance range, which was increased by 20 cents back in the first quarter. We've accomplished quite a bit this year. New Jersey Natural Gas added 8,800 new customers with expansion throughout New Jersey Natural Gas' service territories as our customer growth has returned to pre-pandemic levels. Clean Energy Ventures, grew its project pipeline to the highest level in our company's history, and we increased our in-service capacity by the largest amount for any given year. At S&T, Adelphia Gateway completed its first full year in operation, and Leaf River continued to deliver strong results. And finally, energy services once again delivered outperformance during periods of volatility during the year. As strong as this fiscal year 2023 performance was, we have been more enthusiastic about our future. The details of our guidance for fiscal 2024 are on slide six. We are introducing NFEPS guidance of $2.70 per share to $2.85 per share, which represents a 12% increase from the midpoint of our initial guidance last year. We broadened the size of our guidance range for fiscal 2024 to 15 cents. We have had a range of 10 cents for many years despite significant growth of our earnings. This new range is consistent with those of our peers. Our projections are supported by contributions from all of our business units. During fiscal 2024, a significant portion of our net financial earnings will come from our utility business, as highlighted on slide seven. However, we do expect a higher contribution from energy services in fiscal 2024 than in prior years, due to the outsized contribution from the fixed payments associated with the asset management agreements announced in 2020. Looking ahead, we feel very comfortable with our long-term growth rate in future years, and in fiscal 2025, we expect to return to more normalized segment contributions. Overall, we have a portfolio of complementary businesses that deliver utility-like returns over the long term. With that, I'll turn to a discussion of our business units, beginning on slide 8. We invested over $450 million at New Jersey Natural Gas through a variety of programs in fiscal 2023, with nearly 40% of that capex providing near real-time returns. New Jersey Natural Gas' ability to generate these returns helps to alleviate regulatory lag, which is of particular importance in a high interest rate environment. Within that 40% is our Save Green program, which helps residential and commercial customers lower their energy usage. We spent approximately $60 million in fiscal 2023 to help our customers save money and reduce their carbon footprint, which is New Jersey Natural Gas' largest ever annual investment in the program for the second straight year. We recently completed a commercial energy efficiency project at Jersey Shore University Medical Center, which is located not far from our headquarters here in Monmouth County. We provided over $6 million in energy efficiency financing at Jersey Shore, and expect the net energy savings on this project to pay back the entire cost within four years. Growing these programs is a central element of our decarbonization strategy, and New Jersey Natural Gas has long been a leader in this area. We achieved solid new customer growth throughout the year, adding 8,800 new customers compared to approximately 7,800 last year through a combination of new construction and conversions. During fiscal 2024, our capital deployment strategy will ensure that our infrastructure continues to provide the most reliable and affordable energy delivery service available for our customers. We also expect our customer growth to continue to trend higher. And with our current IIP and Save Green investments, approximately 40% of capital investments are delivering near real-time returns. And finally, we expect to file our next rate case in fiscal 2024, consistent with the timeline of our major technology investments. Moving to slide nine, our solar business, Clean Energy Ventures, had an exceptional 2023. We added 82 megawatts of new solar capacity, which represents the largest capacity increase in any fiscal year since CEV's inception. We expanded geographically, and during the year, over 40% of our capacity growth has come from outside of New Jersey. Our focus is on developing solar investment opportunities to provide high single-digit, unlevered returns, and again, utility-like in their construct. Our project pipeline continues to grow and includes approximately 750 megawatts of potential investment options. As we've discussed in past calls, we are creating a diverse pipeline with multiple opportunities for expansion without any significant reliance on particular geographic location or subsidy programs. Moving to our storage and transportation segment on slide 10, this was our first year with Adelphia fully in operation, which is an 84-mile pipeline that runs from Martins Creek, Pennsylvania, to just south of Philadelphia. Our team did an excellent job ensuring the pipeline operated effectively throughout the fiscal year, particularly during winter storm Elliott. At Leaf River, we continue to pursue service enhancements that will help increase its capabilities for the benefit of our customers. Moving to slide 11, Energy Services had an excellent 2023 with a significant contribution from the AMAs coupled with an outsized performance from our portfolio of strategically positioned assets. The AMAs will allow NJR to exceed its stated NFEPS long-term growth rate this year. And as demonstrated over the course of the last three years, we still have the ability to generate additional earnings from our remaining portfolio in times of volatility. With that, I'll turn the call over to Roberto for a review of our financial results. Roberto? Thank you, Steve, and good morning, everyone.